After noticing a massive surge in price, DeFi tokens are now off to a bumpy journey. The DeFi tokens that have been on the rise for the last two months have begun to drop gradually.
The new report reveals top 250 coins noticed a downfall in September. Though top DeFi protocols such as Yearn.Finance, Compound, and Yam.Finance lost prices this month. After a feverish journey, it appears that the DeFi boom is finally on its end.
September drags the price down
The DeFi hype is built upon Ethereum’s rise in price from $90 t0 $470 2020 high. Amid the DeFi boom, many new tokens rose outshining the cryptocurrency sector. However, for the last weeks, DeFi tokens have been significantly dropping in price and experts claim it’s the end of the boom.
The data from CoinMetrics suggests a whopping decline of 72% of top trading digital assets in the last few weeks. And as September reaches an end the total decline will amount to 93%. For the DeFi tokens, Messari indicates most protocols underwent price rejection of around 15% to 85%.
With bZx Network losing 85%, Curve down 78%, Swerve (-76%), Ren (-57%), Balancer (-53%), THORChain (-52%), Synthetix (-34%) and AAVE (-29%). The chart below shows bearish levels have been away since the initial selloff in March.
What to expect next from DeFi?
After the recent downfall of digital assets, traders started creating a wave of panic in the crypto community. Some thought bears have taken over the market but market fluctuations are norms of this sector. While traders wondering what will be the next support zones, Bitcoin went up to nearing the 11k shocking the community.
In the recent newsletter, DeFiWorld wrote fluctuations are normal and part of a major trend:
“We move in bubbles and 4-year cycles. While everyone is just thinking about what happens today, this week, or this month, you should zoom out and reflect where we are heading. The long term trend is clear: It’s upwards.”
Similarly, the party is not yet over for the DeFi sector and tokens are expected to surge instead of plunging. The bulls will take over once the momentum builds.